Uk Budget posts record £30.4bn January surplus as tax receipts surge
The uk budget swung into a record £30. 4bn surplus in January after a sharp rise in tax receipts, giving Chancellor Rachel Reeves a notable boost ahead of the Spring Statement on 3 March.
Surplus hits highest monthly total since records began
The Office for National Statistics recorded a £30. 4bn surplus in January, the largest monthly total since monthly records began in 1993 and nearly double last January’s £15. 4bn. Revenue from tax in January reached £133. 3bn, 13. 8% higher than the previous January, while analysts had expected a much smaller surplus than the figure that materialised.
Uk Budget: record surplus driven by capital gains
The uk budget figures show capital gains tax was a major driver of the jump in receipts. Capital gains tax receipts in January were nearly £17bn, around 69% higher than in January 2025, reflecting a wave of disposals ahead of a tax rise introduced in the October 2024 Budget. Self-assessed tax receipts also made a large contribution, with self-assessment totals reaching £29. 4bn in the month.
Tax mix: National Insurance and income tax also up
National Insurance contributions increased by £2. 9bn in January, and income tax receipts were £3. 6bn higher than a year earlier, the ONS said. Wealth manager Jason Hollands described the upswing in capital gains tax as a major factor, and Paul Dales of Capital Economics pointed to the Treasury’s freeze on income tax thresholds as dragging more people into higher tax bands and lifting receipts.
Borrowing down for the year but still substantial over 10 months
Borrowing in the 10 months to January stood at £112. 1bn, 11. 5% lower than the same period a year earlier, although the ONS noted it was the fifth-highest borrowing for that 10-month span on record. HM Treasury said borrowing for 2026 is forecast to be the lowest since before the pandemic. Chief Secretary to the Treasury James Murray said the government will work to more than halve borrowing by 2030-31 so that more money can be spent on policing, schools and the NHS.
Economists gave a mixed reading: some said the figures give the chancellor something positive to point to ahead of the fiscal statement on 3 March, while others warned the public finances remain finely balanced as wage growth and wider economic expansion stay slow. Henning Diederichs noted that the broader budget position remains challenging despite the record January surplus.
The next confirmed milestone is the Spring Statement on 3 March, where Chancellor Rachel Reeves is scheduled to set out her assessment of the public finances and fiscal plans for the year.
